Oil has been in a declining trend this week from above $46 from 21st July business. The price has continued to break down progressively to $42.37 lows scored yesterday.
For today, we have seen a draw in the inventory data that was smaller than expected with only Cushing offering a build (+1.4mm vs 750k exp). Crude was -827k vs -2mm exp and Gasoline -420k.
Elsewhere, in related markets, stocks have started to plateau as we head towards the FOMC outcome tomorrow and investors pull back from long positioning while expectations are that the FOMC could come with new language with a hawkish tone, potentially hurting stocks and oil in respect to interest rate expectations for later in this year and a rising DXY.
Oil was offered, but has started to stabilize as the DXY took a dip from 97.44 highs earlier in the week, despite the Fed offering a potentially bullish case for the US dollar while 30Y yields have picked back up again to 2.29 from 2.25 earlier in the US session in a demand based environment, supporting the case for support in the black gold. We are at 12th April highs here offering support, but a hawkish Fed could see the dollar stronger making way for the case for a test of $40.00 in WTI in time to come with a continued bid in DXY.
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